Stocks – Dow Erases Gains for Year on Tech, Trade Turmoil

Investing.com – The Dow erased its gains for the year after plunging Friday on a weak jobs report and concerns over U.S.-China trade tensions.

The Dow Jones Industrial Average fell 2.24% and is down 1.34% year-to-date. The S&P 500 fell 2.33%, while the Nasdaq Composite fell 3.05%.

U.S.-China trade tensions were thrown into further turmoil after President Donald Trump’s trade adviser Peter Navarro said if issues with China are not resolved during the 90-day ceasefire, the administration would raise existing tariffs on $200 billion worth of Chinese goods.

White House economic advisor Larry Kudlow, however, offered a more sanguine outlook, telling CNBC that Trump would consider extending the 90-day tariff truce with China if progress is made in talks.

But Kudlow’s remarks did little to allay concerns as investors abandoned trade sensitive corners of the market like industrials.

Indutrial heavyweights Boeing (NYSE:BA), 3M (NYSE:MMM) and Caterpillar (NYSE:CAT), all of which have strong international exposure, were under pressure, accelerating downside momentum in the broader market.

Tech also contributed meaningfully to the selloff on Wall Street, led by Apple after Morgan Stanley cut its price target on the tech giant’s shares on fears over a slowing smartphone market in China.

Morgan Stanley cut its price target on Apple (NASDAQ:AAPL) to $236 from $253, citing supply-chain conversations in Asia that revealed a weaker backdrop for smartphone demand. That was the third Apple price cut this week following cuts by both Rosenblatt and HSBC, sending Apple’s share price more than 3% lower.

Energy, meanwhile, struggled to take advantage of the rally in oil prices, which had followed an agreement by OPEC and its allies to cut production by 1.2 million barrels a day for the first six months of 2019.

Wall Street’s start to the session was soured by a U.S. labor market report showing the economy created fewer jobs than expected and wage growth fell short of forecasts.

Analysts at CIBC, however, said the report was “constructive,” paving the way for a December rate hike, adding that the drop in job gains was unsurprising as the economy is nearing full employment.